Now if the current owner/occupant ends up being moved to an assisted living facility, the children aren't enamored with being a landlord, the children get job offers out-of-state and move away, etc. then you might be able to has a purely fiscal discussion about selling. 

If so, you are talking about $1,400 to $1,600 in pure interest cost on an annual basis.

I mean, even doing private lending at 6% with $500k is $2,500/month; that's pure cashflow without tenants and toilets to worry about.

I'd focus on the BP House Hacking book, it's pure gold man! 

The investor in my case is purely passive. 

Meaning my pure cash flow will end up somewhere around $900-$6,000.

I’m considering buying an STR property with a land contract (also known as an executory contract or contract for deed) with 0% interest payments … meaning each payment would be pure principal pay down.

Where we are ahead, is this is a pure cash play with no debt, thus no holding costs (yes opportunity cost is missed but let's say 3%). 

Normally if you follow a pure spreadsheet model you will get a house with a funky layout that isn't easy to change in a area where tenants aren't ideal.

To my understanding (having had some conversations with underwriters from several different companies)  there is nothing different between the coverage offered by Proper, Foremost, CBIZ, Allstate, Progressive, Travelers, American National, Liberty Mutual, Pure, or any of the other insurance carriers.... in fact the underwriters, E-suite, and actuaries from all of the companies hop between one another every few years.